Gold and silver prices in India held steady today as markets await crucial US inflation data. Gold closed at Rs 1,41,838 per 10 grams on Monday, while silver reached Rs 1,86,023 per kg. Investors now watch the US CPI report, which could influence Federal Reserve rate hike bets and metal prices.
Gold and silver are waiting for one number today, and it could decide their next move.
The price of the two precious metals, gold and silver, in India held steady ahead of the crucial inflation data being released today. The US CPI data will be published today, likely impacting the price of the precious metals.
The prices of gold and silver are influenced by prices in the international market where the two precious metals trade in US dollars.
How did gold and silver close in India?
After closing at Rs 1,41,032 per 10 grams on Friday, gold price in India closed at Rs 1,41,838 on Monday. Silver price in India also closed higher at Rs 1,86,023 per kg, up from Rs 1,84,049 from Friday's close. The MCX is closed on Tuesday.
Gold and silver prices (India and international)
Source: MCX India; Trading Economics
What gave gold and silver a lift on Monday?
Gold and silver got a lift on Monday, and the trigger came from the Middle East. President Donald Trump expressed confidence that the conflict in Iran was approaching an end following discussions with Qatar's prime minister.
Spot gold and silver prices were sharply up in late US trade on Monday, boosted by a weaker US dollar and a sudden decrease in crude oil prices. Investors responded to fresh expectations for a diplomatic resolution to the US-Iran crisis.
Why does today's US CPI data matter?
But today's US CPI data announcement changes the direction for gold and silver.
What if inflation comes in soft? A softer-than-expected report might lower December rate hike expectations and drive Treasury rates and the currency lower, giving extra support for gold.
And what if it is hot? Stronger inflation, on the other hand, would amplify the consequences of Friday's job surprise and may prompt additional selling in precious metals as traders increase their expectations for further tightening.
What are global prices doing?
In the international market, gold prices edged lower to around $4,120 per ounce on Tuesday, giving back part of the previous session's gains as investors awaited the key US inflation report that could shape expectations for Federal Reserve monetary policy. Silver prices also edged lower toward $53 an ounce on Tuesday, giving back part of the previous session's gains.
Spot gold and silver prices are also being supported by the weakening dollar index. The US Dollar Index hovered around 101.7 on Tuesday after weakening in the previous session.
How likely is a Fed rate hike in December?
According to CME FedWatch, Markets are now pricing in an 99% probability of a Fed rate hike in December as policymakers continue to face persistent inflationary pressures, up from roughly 74% a week earlier.
Why does this matter for gold? Higher interest rates raise the opportunity cost of holding non-yielding assets such as gold, making the precious metal less attractive to investors.
Can cheaper oil help?
Meanwhile, oil prices plunged amid growing optimism over a potential peace agreement between the US and Iran. Brent oil prices briefly fell below $90 intraday during Tuesday's session.
Lower crude prices could help ease inflationary pressures, potentially reducing the need for further monetary policy tightening.
So, what should gold buyers watch?
Today's US CPI number is the big test. A soft print may support gold and silver, while a hot one could resume a sell-off. With the MCX closed on Tuesday, Indian prices will react only when trading resumes.